Well it finally happened. There has been a spring bounce in house prices according to REINZ figures out today.
We often talk about the housing market picking up in spring and until now it has failed to materialise. Looking at the numbers there has been some lift which will no doubt have many of the doomsayers scratching their head.
It isn’t that surprising to see this lift as for a couple of weeks now contacts in the real estate industry have been reporting that there have been increased levels of activity in the market.
Perhaps what has been the most surprising is that the low interest rates haven’t spurred on much activity in the housing market – something Reserve Bank governor Alan Bollard noted last week in the Monetary Policy Statement.
The good news, for investors, out of that statement was that he has now indicated that the official cash rate will be kept low for longer than previously expected.
You’d think this would be seen as a positive sign for the market. However, we put out our quarterly property investment survey today and early submissions flag interest rates as one of the issues for next year. At least it shows investors are thinking about what is happening out there.
Coming back to the latest stats one has to be careful about extrapolating them as it is, after all, only one month. There are still plenty of positive and negative factors battling each other and this could just be a blip, or as some say a dead cat bounce.
Immigration and interest rates are positives; however affordability and a still weak economy are negatives.
The next two months are unlikely to give much more of an indication on where things are heading as they are traditionally pretty dormant. However we did get the spring bounce in summer so who knows.
PS: The latest issue of NZ Property Investor Magazine is in the shops now. In it we have pitted the North Island against the South Island to see which has the best investment opportunities.
Well it finally happened. There has been a spring bounce in house prices according to REINZ figures out today.
